Partnering With Private Equity

Four optometrists, who recently completed private equity transactions, offer their insights

Independent optometrists are increasingly considering private equity partnerships as an option when evaluating the future of their practices. In fact, private equity investments in the health care sector are expected to accelerate in 2019, according to PwC, a consulting, assurance and tax services group.

To gain an understanding of what these doctors can expect, Optometric Management interviewed four optometrists, each of whom entered into a partnership with a private equity firm. These doctors share their experiences, including why they considered private equity, how they evaluated firms and the results. The doctors also offer tips for those considering this path.

JACK SCHAEFFER, O.D., F.A.A.O., is a consultant with My Eye Dr. His practice, Schaeffer Eye Center, has multiple locations in Alabama. He partnered with My Eye Dr. in 2017.

JOE ELLIS, O.D., is an optometrist with Eye Care Partners. His practice, Eye Care Associates of Kentucky, partnered with Eye Care Partners in 2016. Additionally, he is past president of the American Optometric Association.

GREG USDAN, O.D., is an optometrist with My Eye Dr. His practice, Memphis Family Vision, partnered with My Eye Dr. in 2018.

DAVID GROSSWALD, O.D., is an optometrist with Total Eyecare Partners. His practice, The Eye Center, partnered with Total Eyecare Partners in 2018.


According to Jack Schaeffer, O.D., Alabama, a partnership with private equity provided an opportunity to not only grow his eyecare practice, but also his family’s careers. (Children Brooke, Mark and David are all optometrists.) His practice, Schaeffer Eye Center, has 18 locations and 21 doctors in Alabama.

DR. SCHAEFFER SOUGHT: the practice of full-scope optometry, a technology infrastructure to support the practice and a management team that had the business acumen to deal with issues, such as an economic downturn or cuts to reimbursements, that can arise in business and health care.

THE RESULT: Dr. Schaeffer is now a consultant with My Eye Dr., in which he is also a personal stock holder. Additionally, his children hold positions at the company. Brooke is clinical field director, and Mark is clinical field manager. (David, recently out of optometry school, practices at Schaeffer Eye Center.) This private equity partnership unfolded about one year ago.

Joe Ellis, O.D., Benton, Ky., says a partnership with private equity was the next step in growing and continuing care in his O.D.-M.D. practice. Dr. Ellis’s practice, Eye Care Associates of Kentucky, is comprised of 10 optometrists and one ophthalmologist.

DR. ELLIS SOUGHT: a patient-centered, medically driven approach to eye care; and an organization with support for vertical integration of vision care and for doctors in organized optometry that also has the right culture.

THE RESULT: Dr. Ellis joined Eye Care Partners in 2016 with no time frame to leave.

For Greg Usdan, O.D., Memphis, Tenn., a partnership with private equity allowed him to continue his legacy optometry practice, while also affording him the lifestyle he envisioned for his young family. Dr. Usdan has two children, ages 7 and 10. His practice, Memphis Family Vision, has two locations and was started by his grandfather in 1940.

DR. USDAN SOUGHT: assistance, specifically to handle insurance claims and regulations, as well as to be able to offer employee benefits similar to other area employers. He also wanted to compete with other eye care-providing entities, including those that operate locally or on the internet. Additionally, Dr. Usdan wanted to continue to practice while being able to spend more time with his family.

Completing the Deal

EXECUTING A TRANSITION to private equity involves some management steps:

Telling the staff. At Dr. Grosswald’s office the patient schedule was cleared for a staff meeting, at which he explained the transaction. Reactions were mixed, Dr. Grosswald says, with excitement, apprehension and indifference.

Dr. Usdan says he broke his staff down into smaller groups to share the news, moving from associates, to office managers, to the whole staff. He says he stressed that aspects of their job would be the same or improve, such as better benefits and greater chances for advancement in a larger entity.

Technology switches. There may or may not be overlap between the systems that the private equity firm would like installed and the ones you currently use. For example, Dr. Schaeffer’s offices moved to a new practice management system. After the deal was signed, the current system remained for 60 days. The new system was then rolled out, first in one office, then in four more and four more after that, etc., to perform the transition over a period of time. At Dr. Usdan’s practice, the switch came for the point-of-sale system, which the staff is working on mastering.

Communicate with the patients. Several of those interviewed say the private equity firm you choose will send out mailers to patients to make them aware of the change. Additionally, appointment reminders and marketing materials may have the private equity company’s branding, says Dr. Usdan.

“There are going to be patients who are going to be unhappy,” he says. When a patient expresses these concerns, Dr. Usdan says he takes special care to let the patient know that nothing will change with the visit and, sometimes, he takes the patient around the office to see the same staff faces for reassurance.

THE RESULT: Dr. Usdan joined My Eye Dr. about three months ago.

For David Grosswald, O.D., Conyers, Ga., a partnership with private equity solidified his family’s financial future, while also allowing him to continue to come to work every day. He has four children, three in college. He says, “I wake up every morning and say, ‘I gotta go to work.’” His practice, The Eye Center, is 20 years old.

DR. GROSSWALD SOUGHT: value of the medical model, value of the optometrist, quality of the leadership team assembled and equity in the entity.

THE RESULT: Dr. Grosswald signed a 10-year contract with Total Eyecare Partners, in which he also has an equity stake. His partnership deal was completed six months ago.

For those considering this process or with an interest in how it takes place, the doctors offer the following steps:


Each doctor suggests seeking the experiences and advice of colleagues who have been through a private equity transaction. Dr. Usdan also recommends attending lectures on private equity.

Additionally, services are available via the American Optometric Association, says Dr. Ellis. (See AOAexcel program: .)


As Dr. Ellis puts it: Have your financial ducks lined up before exploring any transaction. For example, know your profits and losses, assets, cash flow and EBITA, or earnings before interest, taxes and amortization.

Other details you’ll need to have in order: inventory, leases, employee agreements, etc.

A consultant may aid in this action step.


Dr. Grosswald found that the services of a consultant were valuable to aid in the packaging, evaluation of firms and negotiation of his offer.

Dr. Schaeffer hired a consultant to help evaluate his options and, subsequently, hired a mergers and acquisitions firm, which included an arm for both legal and accounting.

The doctors agree that the legal counsel chosen should have experience with mergers and acquisitions within the health care sector. Such counsel can understand the process, nuances within the deal and make recommendations based on your situation and their experiences.

Other details could include safe harbor laws, legislation on optometry and ophthalmology practicing together and state boards for both specialties, Dr. Ellis enumerates.

Possible ways to identify a consultant include: looking at news of previous transactions, which usually list the consultant, looking to groups, such as O.D.s on Facebook, which allow crowd sourcing, and asking the private equity firm with which you are working to recommend someone.

Accounting is another consideration. Dr. Grosswald says his personal accountant allowed him to lay out a plan for his future, identifying the earnings he would need to maintain his family’s current lifestyle, as well as investments needed for retirement.

Professionally, an accountant will advise on the impacts of a private equity partnership on your business, specifically as it relates to the type of business you have, for example, an LLC or corporation, says Dr. Ellis. This is in addition to the usual business services offered by an accountant.


Dr. Schaeffer says one of the ways he advises optometrists to gather information about the private equity firm is to look at previous purchases. Talk with those practices about their abilities and results they witnessed in the practice after the sale.

Dr. Ellis says he asked the firm’s executives forward-looking questions, for example regarding acquisitions down the road. He also spoke with optometrists in acquired practices to discuss culture concerns, for example, if the doctors have a say in hiring.

In addition, he says to assess your partner's business functions, such as billing and coding, technology, etc.

“It’s one thing to acquire and pay fees to acquire a practice, it’s another thing to operate the thing after it’s done,” Dr. Ellis says.


To determine whether a partnership could be the right next move, evaluate whether you’re willing to cede some control to the private equity firm. For Dr. Schaeffer, it was the optical because “that’s what they do really well,” he says.

Dr. Usdan was willing to trade some of the practice management duties, such as setting up employee benefits packages, so he could better see and take care of his patients.

“I am really enjoying the focus on patient care, rather than having to do many of the administrative burdens they took off my plate,” Dr. Usdan says.

Relinquishing some of these practice management tasks may be easier for some than others. Specifically, Dr. Ellis says it can be tougher on those active managers at a practice to part from old habits. (Dr. Usdan says he has also found it difficult to stop some practices, such as fielding after-hours calls and requests from patients.) He recommends acknowledging this process as a transition, as opposed to expecting the urge or need to complete some tasks will stop all of a sudden.


The contract will spell out how, specifically, the private equity firm will align with your expectations for compensation and the future of your practice. (Just as professionals can help in negotiations, they can provide valuable advice in reviewing the contract.)

“The contract they give you is fair, but it is a template and needs to be customized to address your situation,” Dr. Usdan says of his experience. “Every merger is different; every group is different.”

For example, Dr. Usdan owned one of the buildings that his practice operates in and rents space for the second location.

Dr. Grosswald advises getting even seemingly minute details, such as continuity of holiday bonuses and regular staff lunches, written out in the contract, if they are important to you.

Once you’ve signed the contract, a number of action items need attention for the transition, for example, telling the staff. (For more on this, see “Completing the Deal,” p.30.)


As four doctors looked at how optometrists do business — for example, legislative changes to insurance claims — and what the next years of their lives should look like — such as practicing medical optometry or serving optometry on a larger scale — the doctors interviewed all found the best way to proceed for their situations was through private equity partnerships. They arrived at this collective conclusion after acquiring information, evaluating possible partners and hiring help. OM